Buyer’s Remorse For Homebuyers, And How To Avoid It

After a lot of saving and a lot of stress, you’ve just bought your first house. You’re thrilled! But soon, the reality of homeownership hits. You start to notice wear and tear and things that need to be fixed. You wonder how much it will cost, and how you can afford to maintain the property and pay all your other bills, in addition to your monthly mortgage payments. The next thing you know, you’re thinking, “What was I thinking?”

If you’re having these thoughts, you’re dealing with homebuyer’s remorse. Read on to learn how common it is, how to avoid it and what your options are if you really feel you’ve made a mistake.

What causes homebuyer’s remorse?

Buyer’s remorse is especially common among first-time homebuyers. It’s easy to begin second-guessing the decision to spend a huge chunk of money — or more likely, borrow a huge chunk of money in the form of a mortgage. It’s a big life change, and one one that will be with you for a long time, too.

Buyers could feel the sting of regret for any number of reasons. Here are some thoughts that might kick in once you get the keys:

• “I paid too much”: This thought often hits a homebuyer at or right before the closing, when they see, laid out in a single statement, all the closing costs they have to cover, plus the ongoing expenses (like mortgage payments and property taxes) they’re now obligated to pay. Or maybe they got caught up in a bidding war and, in the joy of victory, didn’t fully understand how far over budget they had gone.
• “I made the wrong choice”: It’s rare that a house ticks every item on your checklist, with no compromises. Still, if someone buys a home that feels too big, or too small, or doesn’t have something they really wanted, buyer’s remorse can set in. It often compounds if they jumped at the first place they saw, were under pressure to find a place or had a difficult choice between two homes.
• “I don’t like my new neighborhood”: Maybe the area lacks certain amenities, or is noisy at night, or has more traffic than the buyer realized, making commuting to work trickier. While the house itself can look great, the area might leave something to be desired.
• “I can’t keep up with the maintenance”: Whether it’s a need for unexpected repairs or the ongoing drudgery of chores, some buyers are overwhelmed by continuous home upkeep.
• “I miss my previous home”: Sometimes the source of buyer’s remorse has nothing to do with the new purchase at all, but simply a sense of nostalgia for an old house, neighborhood or lifestyle.

Tips for avoiding homebuyer’s remorse

Buyer’s remorse is often a natural part of the homebuying process, because such a big investment is involved. But there are ways you can manage your expectations to limit feelings of regret.

1. Get preapproved for a mortgage

Going through the preapproval process before you even start house-hunting takes away some of the financial question marks by giving you a hard number that a lender is likely willing to loan you. You can base your homebuying budget and your price range on that amount (but resist the urge to spend the full amount just because you can).

2. Slow down your search

No matter how rushed you might feel in a competitive market, remember that this decision is going to impact your life, and your finances, for the long-term — many years, or even decades. Homes are staying on the market for a bit longer now than they used to, and buyers have a bit more leverage, so take your time. Don’t be afraid to ask questions. And remember that, if there’s nothing out there that suits your needs right now, it’s OK to wait. You’re better off putting things on hold for a bit than you would be buying the wrong house.

3. Work with a real estate agent you trust

A knowledgeable local real estate agent can be your best friend on your homebuying journey, both in finding a house and in avoiding buyer’s remorse. Agents are licensed experts who understand what’s available in the area that meets your criteria and budget — they can answer your questions and warn you if you’re making a rash or costly decision that you might regret. However, don’t let yourself feel pressured to make a deal you don’t feel good about. You know what’s best for you.

4. Get a home inspection

A professional home inspector performs an in-person evaluation of a home’s condition. Their findings can help you avoid pricey surprises — if repairs are needed, you can budget for them or ask the seller to help cover the cost. If you have an inspection contingency in your contract, major problems can even be an excuse to back out of the deal.

5. Negotiate your contract carefully

Make sure your real estate agent or attorney includes contingency clauses in your contract. These can allow you to cancel the purchase if certain circumstances are not met. Be sure you understand exactly what fixtures come with the home as well, and identify each item that you want specifically. Any costs you’d like the seller to cover should be spelled out in the contract, too.

What to do if you’re experiencing buyer’s remorse

Coping with buyer’s remorse can be complicated, and your options can depend on when in the homebuying process you start to have doubts.

If you’re still in negotiations and haven’t signed anything yet, that’s easy: You can simply walk away. You can also work with your agent or a real estate attorney (or both) to insert contingency clauses into the contract that make you feel more comfortable. If you fear a home inspection will uncover major issues, for example, an inspection clause can give you room to back out without much hassle if problems are, in fact, found.

Once you’re further along in the buying process, it gets more challenging. For example, if you’re already in contract and then find another property you like better, you will likely have to forfeit your earnest money deposit to turn your remorse into a canceled contract. Given that earnest money typically amounts to about 1 percent of the home’s price, that can be thousands of dollars lost.

When you already own the home, but now wish you didn’t, the situation changes. If a specific problem is the issue — for example, if the basement floods every time it rains — you may have a legal claim against the seller if you can prove that they knew about the issue and deliberately failed to disclose it to you. This can get complicated, however, and laws about your right to pursue legal action vary by state. If you just generally feel like you made a mistake, it’s best to look into ways to make things more bearable (like soundproofing or renovations), at least until you’re able to sell without financial ramifications.

Bottom line

It’s natural to experience some level of buyer’s remorse when you’re buying a home. After all, it might be the single biggest purchase of your lifetime, and you’re taking on a huge amount of responsibility. But if you plan carefully and enlist the right help, your homebuyer’s remorse can be no more than a fleeting regret.